If you’re in the commercial real estate game, you know that it can be a bumpy ride. The highs can be higher and the lows less low if you’re aware of the trends. Here are a few critical factors that are currently affecting the marketplace.
Rents Are High
It’s good to be a landlord these days. Now that the eviction ban has ended, rental rates are climbing once again. Between August 2020 and August 2021, rents have gone up by 11.5%, the first time they’ve ever risen by double-digits.
Prices Are Soaring
Right now, it’s a seller’s market, and prices keep ascending. States such as New Mexico, Wyoming, Nevada, and Utah are especially hot, although dollar figures continue breaking records all around the country.
Buying Is Slowing
Despite intense competition, fewer sales are happening. Numerous factors may be causing this. Perhaps the threat of rising mortgage rates is triggering buyer trepidation. Naturally, rising sale prices could be discouraging purchases. Whatever the reasons, sales are down, and bidding wars are happening with less frequency.
Getting a Mortgage Is Easier
The availability of mortgages has improved, so it’s more likely than before that you’ll qualify. While there’s been a jump in activity with conventional loans, there’s also more availability among those with more stringent requirements, such as jumbo loans. If you’ve had trouble securing a mortgage in the past, now may be the ideal time to speak with a lender.
Interest Rates Are Low
The lower lending fees that have eased getting mortgages are likely to remain. Because the Federal Reserve wants to spark continued economic recovery, it’s a good bet that short-term interest rates will stay low into the foreseeable future.
Foreclosures Are Increasing
Now that foreclosures are once again allowable, lenders are rushing to act. Areas with some of the highest home repossession rates in recent days are California, Florida, Dallas, and New York. These are great places to go house hunting if your business is fix-and-flips.
Suburban Territories Are Popular
Many movers want to escape the high prices associated with urban life. Additionally, leaving metropolitan areas means increased safety and bigger homes for raising families. With the overall economic uncertainty that plagues us all, plenty of city-dwellers are finding these factors to be irresistible.
Your odds of profiting off of commercial real estate get better with increased knowledge. Let these informational tidbits guide your decision-making process, and you’re bound to see higher rewards.